B2B Niche Distribution - A High Profit Margin Opportunity

The company is a Pittsburgh-based niche wholesale distributor, and their business model is aimed at helping professional contractors. The company’s product line is positioned for creating beautiful landscapes and luxury outdoor living projects. The company primarily sells to landscape contractors in the area from its brick-and-mortar location, fulfilling project supply orders for the irrigation, drainage, landscape accent lighting, pond and water feature systems. Demand for outdoor living supply is growing due to rising disposable incomes among high-income and high net-worth demographics. This niche supply business has long-standing contractor accounts, strong cash flow, and sustainable competitive advantage to continue expanding operations and accelerate its growth trajectory. Founded in 1995, the distributor is currently exploring strategic options for the future direction of the company. While it's a small business, they possess a proven model and a market niche that can be scaled effectively in the outdoor living supply segment. According to the market data, this supply segment is highly fragmented, presenting a ripe opportunity for consolidation. To capture the next stage of growth and add a significant value, the company seeks a growth-minded partner who can align with the company's vision. Forming this 50:50 strategic alliance would serve as an ideal vehicle to facilitate the acquisition of other independent distributors and for launching an eCommerce store. Executing a roll-up strategy not only can accelerate their growth trajectory but the synergies will perfectly allow for consolidation into adjacent markets such as hardscape, turf & ornamental supply. The industry's validated thesis identifies this growth venture as a unique ground-floor opportunity with the potential for growth into an enterprise value ranging conservatively to $100 million over the next five years. Since the client base is territorial, the distributor primarily focuses on selling and supplying systems for turn-key projects in the region. Although the current business is not easily relocatable, the niche supply model can be replicated. This presents another opportunity to expand to new fastest growing cities. The real estate is available separately. The existing premises is a 5,000 sq. ft. industrial building (steel) with high-ceiling, clear span, on a 1/2-acre lot. Raising: $800,000 for 50% Equity EV: $1,600,000 Multiple: 3.50x